The Truth about ClickBank and PPC...

18 replies
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it all comes down to the very simple formula

$SALE / ( ConversionRate x PPC CostPerClick )

which means nothing else than what the actual PPC costs are for one conversion - taking into account the ConversionRate as well as CostPerClick.

The conversion rate and the CPC can of course vary, but we can take some conservative average numbers. Let's assume we have a conversion rate 1:60 and a CPC of $0.37

In this example this would mean a COST (!) of $22.20 per Conversion.

(Note that this does NOT take into account potential refunds)

Using such a formula it becomes clear that is basically IM "suicide" to promote a product off clickbank which makes $20/sale....where the cost per Conversion (Sale) is $22.20!

If we want only 100% profit, that is: We spend X on PPC, and we want to make X x 2 back...so we want to promote a product which PAYS twice as much as we spend. <--- ultra simple math

Clickbank right now has 8297 active unique products (i just checked on cbengine.com which i use a lot recently)

However, from the 8297 active unique products on clickbank only 249 pay more than $50/Sale! Only 3% of all clickbank products which could yield you 100% profit. That is, again, not taking refunds etc. into account.

Where and How to tweak?
---------------------------------

Well of course...you have some choices:

) You sell those few products which pay more
) You get lower CPC
) You get higher conversion rate

All in all, i used typical numbers...and i am just saying that PPC and CB is NOT as easy as some people (especially vendors) claim!

Especally getting good conversion rates proves to be tough, and getting lower CPC needs you need to do very good keyword research. The $0.37CPC are also some typical average, and not even on the "low" end. I see people bidding up to three times this amount in certain mainstream niches which means big big PROFITS. (For Google <----

G.
#clickbank #ppc #truth
  • Profile picture of the author GeorgR.
    Originally Posted by ProductCreator View Post

    37 cents per click? I consider myself crap at PPC but even I can beat that CPC.

    I think that CPC of less than 20 cents average is absolutely essential for CB.
    you can go on content network, all right. But then you get the worst conversion rates.
    I am aware that my account is a bit slapped, have a hard time to get really low bids on search, maybe if i go really, really long tail.
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  • Profile picture of the author LB
    Clickbank's earnings per sale are skewed. For example, if you have 2 products on the same account- one that pays $50 and one that pays $10 then the average commission would be the average of those two numbers (assuming equal sales).

    I have products where the affiliates make $40+ per sale but it will only show on CB as below $20 because there is more than one product per account.

    If you look at CB's top products...some with 300+ gravity, almost none of them have $50 or higher payout per sale according to CB.

    I think you are giving valuable advice instructing people to consider cost per conversion before charging out spending on PPC. But you have to keep in mind that CB's statistics are simply not accurate enough to make a judgment until you promote the product yourself.
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  • Profile picture of the author JayXtreme
    Hi George..

    As much as this is a topic I really like to discuss....I think this post should probably be in the Pay Per Click sub-forum, you can find it here:

    Adsense / PPC / SEO Discussion Forum

    Peace

    Jay
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    Bare Murkage.........

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  • Profile picture of the author matthewd
    Originally Posted by ProductCreator View Post

    37 cents per click? I consider myself crap at PPC but even I can beat that CPC.

    I think that CPC of less than 20 cents average is absolutely essential for CB.
    I've been turning a nice profit with CB products at $0.50-$1.00/click for a long time now.
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    • Profile picture of the author Tom B
      Banned
      It really depends on what you are doing.

      If you are not building a list of people then it will be harder to make a profit. If you are building a list than your lifetime customer value will be higher giving you the ability to break even or lose a little on the front end.
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    • Profile picture of the author GeorgR.
      Originally Posted by matthewd View Post

      I've been turning a nice profit with CB products at $0.50-$1.00/click for a long time now.
      Forex?

      What is your conversion rate?

      It cannot be a $20/pop product.

      by the way...i am *preaching* here on Warriors about all this, but myself i am the biggest moron since basically ALL my adwords account was a big failure, according to all those calculations.

      You just cannot make profits, and for sure not BIG profits paying $0.37 for a $20 yeast infection treatment or similar.

      Ironically, i paid $0.45 (!!!!!!!!!!!) also on content network - i have no idea how and why.

      I even made a set of very nice banners to get many impressions, i followed all tips/advice in regards to content network...STILL paying over $0.40/click on CONTENT...give me break!

      Just weeded out my whole AW account since i am getting sick of this, really.
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      • Profile picture of the author matthewd
        Originally Posted by GeorgR. View Post

        Forex?

        What is your conversion rate?

        It cannot be a $20/pop product.
        I won't give the markets, but there are 2
        of them where I have been doing this in and
        the products in both markets pay from $24-26/sale.
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  • Profile picture of the author John Derrick
    I agree with you Thomas in general....

    but the whole "lifetime value of the customer" is a can of worms in itself and can lead people to spending more money on advertising than they should and banking their companies hopes on the fact that someday those customers are going to pay you back.

    The restaurant business works this way when they have coupons and other lead loss offers, but it is risky.

    Even if it's only 5 cents a click, you should always be making money if you are running a business.

    Just my 2.5 cents worth.
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    • Profile picture of the author Tom B
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      Originally Posted by John Derrick View Post

      I agree with you Thomas in general....

      but the whole "lifetime value of the customer" is a can of worms in itself and can lead people to spending more money on advertising than they should and banking their companies hopes on the fact that someday those customers are going to pay you back.

      The restaurant business works this way when they have coupons and other lead loss offers, but it is risky.

      Even if it's only 5 cents a click, you should always be making money if you are running a business.

      Just my 2.5 cents worth.

      I was assuming they would know the value of the customer before getting crazy on advertising costs with the intention of losing on the front end.
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  • Profile picture of the author jasonl70
    here's some numbers from 1 of my campaigns I just recently analyzed for 2009:

    I pay on average 56 cents per click, sent to an opt-in page
    40% opt -in
    5.4% of my opt-ins eventually purchase
    average commission: $40.91 (this figures in returns, possible multiple sales, etc)

    So, for every 100 clicks, I spend $56, get 40 opt-ins, 2.16 sales for a total of $88.36

    This does not include the adsense income I get from that same traffic, which is about 15% of the income this campaign generates.

    It also does not include a promotion I am in the middle of doing, which has added another 50% to my earnings for the year so far. oh - and I also pulled an OTO several months ago that was generating over 30% of my income..

    So it is certainly possible, but it takes some testing and tweaking.. this campaign originaly was only generating perhaps 20% ROI.
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  • Profile picture of the author tgrpublishing
    The difficulty with ClickBank and PPC is it can be expensive to try out new products, and there are so many of them!

    Here's how I do it.

    Assume that a product pays $20, and we can get clicks for $0.20c. That means your campaign will have to convert 1:100 to break even.

    BUT.. you actually want to do better than break even. You want to profit, so you'll need > 1:100. This means, if you haven't converted in the first 100 clicks, it's NOT going to be a profitable campaign and there's no point throwing any more traffic at it.

    You can take this a bit further, and only send 65-80 clicks, ensuring that if the campaign doesn't meet your expectations, you've only wasted that many clicks.

    Of course, you might want to test your ad copy to improve conversions, or test landing pages to better presell, or build a list to follow up with, and that's up to you.

    I just tend to throw up lots of campaigns very quickly, and kill them after 75 clicks or if they're not converting. Anything that does convert will tend to continue converting, and we're in the money
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  • Profile picture of the author activetrader
    what is it you are all promoting? $.20 per click? conversion rate 1:60? I'll shut up

    PS: I am not adwords wizz but there are high converting niche products......
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    • Profile picture of the author Nathan Hangen
      I think you are better off sending them to a landing page where they opt-in and you send them to the CB site. Sure, you can make money doing that, but you aren't building any equity and you can create a landing page with high QS based on less competitive keywords...maybe I shouldn't have given that away.
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    • Profile picture of the author GeorgR.
      Originally Posted by activetrader View Post

      what is it you are all promoting? $.20 per click? conversion rate 1:60? I'll shut up

      PS: I am not adwords wizz but there are high converting niche products......
      define "high converting"...please lets stay withing clickbank...since thats the only stats i have...and i can spend the next hours doing more research about typical conversion rates...and i can tell that literally EVERYONE will list 1% as a normal, average...with 1.5% - 1.8% as most observed.

      This straight taken from the current best sellers and affiliates like sixpackabs or whatever the current top sellers are..according to THEIR observations. (as well as mine)

      if you get lower, 1:50 - 1:30 you are doing very, very good. If you have a good pre-selling landing page, and you find a really low competing niche, 1:25 - 1:30 is possible with some luck.
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  • No,Nathan, give it away! Just kidding. Do appreciate the insight. Any more tips??? ha ha
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  • Profile picture of the author GeorgR.
    Nathan, sure.

    What i did right now, for certain niches i made really good and legit looking review sites. (Not to pat myself on the back...but the sites ARE good). Convert WAY better than your avg. CB landing page.

    QS is usually anywhere from 7-9..most of then 7 or 8.

    Anyway...i did a lot of thinking yesterday in regards to my "math"...and especially also after reading that one thread with "my sister makes $1000/day with this or that keyword".

    This is nothing new, but i "discovered" that there is some simple math and formulas, MAINLY also in regards to avg. search volume...and using this formula you can calculate averages whether a certain KW can even statistically yield such a profit, eg $1000/day.

    We can take many variables, fill in avg. daily search volume, CPC, avg. conversion rates and CTR rates...and we can look at a keyword and immediately make a statement whether it is even mathematically *possible* to make $1000 with a certain keyword .... or NOT.

    Then you will understand that a KW, say which only has an avg. search volume of 6000/month w/ a product paying $20...LOGICALLY is 100% impossible to make $1000 profits/day.

    Now..this is basic math every IM certainly knows...but i myself was slacking playing with all those numbers, had very unprofitable cmapaigns running.. I am working on a system which will take all this into acc.

    activetrader: Please don't tell me you're paying < $0.20 in a "competive" niche...come on, there's no way.
    Keyword research is key...yes, then its possible.
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  • Profile picture of the author irving
    Some really interesting facts!!
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